Digital Assets Replace Venture Capital as Active Treasuries Emerge in Crypto
Summary
This week’s Crypto Long & Short highlights the emergence of Digital Asset Treasury Companies (DATCOs) as a new capital backbone in the crypto industry, replacing traditional venture capital. With venture funding dwindling and corporate treasuries holding more digital assets than ever before, DATCOs are actively deploying these assets into staking, validation, and ecosystem development, generating yield, and strengthening network infrastructure. This shift towards on-chain productivity, transparency, and governance is poised to redefine corporate finance in the blockchain era.
The Rise of DATCOs: Active Treasuries Are Replacing VC in Crypto – by Abdul Rafay Gadit
For years, corporate treasuries in crypto were seen as mere speculative balance sheets. Buying bitcoin, holding, and hoping was the strategy popularized by MicroStrategy. However, this passive model is being displaced by a new class of participants: Digital Asset Treasury Companies (DATCOs). These are characterized more like venture capital firms than custodians because they actively deploy digital assets into productive activities such as staking, validation, and ecosystem development.
The shift is driven by the stalling of crypto’s traditional funding model. Venture capital investment fell 59% in the second quarter of 2025 to $1.97 billion, its lowest level since 2020. Yet, public companies now own over one million bitcoin, roughly 5% of supply. What began as a store of value has become a pool of productive capital.
DATCOs are showing how this transformation works in practice. Instead of simply holding digital assets, they actively deploy them into various blockchain participatory activities. Across Europe and Asia, publicly listed DATCOs allocate significant portions of their treasuries to staking, validation operations, and ecosystem development. This approach not only diversifies exposure but also generates yield and strengthens the networks that underpin the digital-asset economy.
This active-treasury model combines transparent on-chain operations with yield generation. The implications extend beyond balance sheets as DATCOs gain influence and insight into emerging protocols—the advantages once reserved for venture capital. Regulators and institutions are beginning to take notice, drawn by the appeal of traceability: every transaction, validator reward, and allocation is verifiable on-chain.
The age of passive balance-sheet exposure is ending. In its place is a model where capital works alongside code—where the most successful treasuries will be those that help build the networks they own.
While We Wait(ed) – by Andy Baehr
When bitcoin perma-bulls recalibrated, the bottom was near, right? On November 5, Galaxy’s Alex Thorn published a note taking his year-end price target to $120K from $185K. The following day, Cathie Wood took her 2030 target down from $1.5 to $1.2 million. Bitwise’s Matt Hougan maintained his call for a Q4-into-Q1 rally but not one that would ring the $200K bell he’d previously predicted.
We are neither calling a bottom nor making price predictions. Yet, the prospect of the government reopening has prices thawing and our thoughts turning to… what’s next? We can start with a few observations about rates. The Fed recently conducted its largest liquidity injection since the 2020 pandemic: $125 billion in total.
The Standing Repo Facility saw its record single-day operation on October 31, with $29.4 billion injected. Bank reserves had fallen to $2.8 trillion due to QT and exacerbated by the shutdown. SOFR moved lower without drama. CDOR shifted but remained within its local range. The USDC rate is shown below.
We observe a divergence in rates: SOFR sank lower while CDOR sprang higher. This phenomenon, driven solely by the utilization of Aave lending pools, typically signifies one of two scenarios. Higher rates usually mean lenders are pulling out for better opportunities or borrowers are coming in fast, sensing good opportunities. It’s interesting to see SOFR and CDOR move at different times.
This reminds us that for crypto’s next leg up to maintain its quality from Q2 and Q3, major growth blockchains (ETH, SOL, etc.) need to lead the way. More growth will be signified by the rise in Ethereum daily transactions, with stablecoins and tokenized assets playing a crucial role. As new ETFs hit the market, we expect signs of strong allocation to these asset classes.
Chart of the Week
This week, we examine the Ethereum DEX volumes and price performance of the UNI token in context of Uniswap’s proposal on activating the fee switch for the protocol. The protocol is looking to take a cut of LP fees and utilize that revenue in buying back and burning UNI tokens.
CoinDesk Research estimates that at current projections, the protocol is likely to earn $300 million in annualized fees, placing it just behind HYPE and PUMP in terms of token buybacks. The recent divergence between Ethereum DEX volumes and UNI price provided an interesting opportunity but seems to be closing up given the surge in UNI price.
Uniswap as a proxy bet on Ethereum post this proposal might continue its prevalence. However, concerns around increased competition, covered by CoinDesk Research here, should not be overlooked in the coming market analysis.
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Digital Assets Replace Venture Capital as Active Treasuries Emerge in Crypto
Summary
This week’s Crypto Long & Short highlights the emergence of Digital Asset Treasury Companies (DATCOs) as a new capital backbone in the crypto industry, replacing traditional venture capital. With venture funding dwindling and corporate treasuries holding more digital assets than ever before, DATCOs are actively deploying these assets into staking, validation, and ecosystem development, generating yield, and strengthening network infrastructure. This shift towards on-chain productivity, transparency, and governance is poised to redefine corporate finance in the blockchain era.
The Rise of DATCOs: Active Treasuries Are Replacing VC in Crypto – by Abdul Rafay Gadit
For years, corporate treasuries in crypto were seen as mere speculative balance sheets. Buying bitcoin, holding, and hoping was the strategy popularized by MicroStrategy. However, this passive model is being displaced by a new class of participants: Digital Asset Treasury Companies (DATCOs). These are characterized more like venture capital firms than custodians because they actively deploy digital assets into productive activities such as staking, validation, and ecosystem development.
The shift is driven by the stalling of crypto’s traditional funding model. Venture capital investment fell 59% in the second quarter of 2025 to $1.97 billion, its lowest level since 2020. Yet, public companies now own over one million bitcoin, roughly 5% of supply. What began as a store of value has become a pool of productive capital.
DATCOs are showing how this transformation works in practice. Instead of simply holding digital assets, they actively deploy them into various blockchain participatory activities. Across Europe and Asia, publicly listed DATCOs allocate significant portions of their treasuries to staking, validation operations, and ecosystem development. This approach not only diversifies exposure but also generates yield and strengthens the networks that underpin the digital-asset economy.
This active-treasury model combines transparent on-chain operations with yield generation. The implications extend beyond balance sheets as DATCOs gain influence and insight into emerging protocols—the advantages once reserved for venture capital. Regulators and institutions are beginning to take notice, drawn by the appeal of traceability: every transaction, validator reward, and allocation is verifiable on-chain.
The age of passive balance-sheet exposure is ending. In its place is a model where capital works alongside code—where the most successful treasuries will be those that help build the networks they own.
While We Wait(ed) – by Andy Baehr
When bitcoin perma-bulls recalibrated, the bottom was near, right? On November 5, Galaxy’s Alex Thorn published a note taking his year-end price target to $120K from $185K. The following day, Cathie Wood took her 2030 target down from $1.5 to $1.2 million. Bitwise’s Matt Hougan maintained his call for a Q4-into-Q1 rally but not one that would ring the $200K bell he’d previously predicted.
We are neither calling a bottom nor making price predictions. Yet, the prospect of the government reopening has prices thawing and our thoughts turning to… what’s next? We can start with a few observations about rates. The Fed recently conducted its largest liquidity injection since the 2020 pandemic: $125 billion in total.
The Standing Repo Facility saw its record single-day operation on October 31, with $29.4 billion injected. Bank reserves had fallen to $2.8 trillion due to QT and exacerbated by the shutdown. SOFR moved lower without drama. CDOR shifted but remained within its local range. The USDC rate is shown below.
We observe a divergence in rates: SOFR sank lower while CDOR sprang higher. This phenomenon, driven solely by the utilization of Aave lending pools, typically signifies one of two scenarios. Higher rates usually mean lenders are pulling out for better opportunities or borrowers are coming in fast, sensing good opportunities. It’s interesting to see SOFR and CDOR move at different times.
This reminds us that for crypto’s next leg up to maintain its quality from Q2 and Q3, major growth blockchains (ETH, SOL, etc.) need to lead the way. More growth will be signified by the rise in Ethereum daily transactions, with stablecoins and tokenized assets playing a crucial role. As new ETFs hit the market, we expect signs of strong allocation to these asset classes.
Chart of the Week
This week, we examine the Ethereum DEX volumes and price performance of the UNI token in context of Uniswap’s proposal on activating the fee switch for the protocol. The protocol is looking to take a cut of LP fees and utilize that revenue in buying back and burning UNI tokens.
CoinDesk Research estimates that at current projections, the protocol is likely to earn $300 million in annualized fees, placing it just behind HYPE and PUMP in terms of token buybacks. The recent divergence between Ethereum DEX volumes and UNI price provided an interesting opportunity but seems to be closing up given the surge in UNI price.
Uniswap as a proxy bet on Ethereum post this proposal might continue its prevalence. However, concerns around increased competition, covered by CoinDesk Research here, should not be overlooked in the coming market analysis.
Listen
Engage
Don’t miss the Webinar "From News Headlines to Price Impact: The evolving Digital Assets markets and regulatory landscape" with CoinDesk Research, hosted by LSEG.